Conspiracy at the heart of the European Union

12 Mar 2006

Article by John Blundell in the Business

ONE of the great clichés of politics is that Britain has no written Constitution. Like all such stale propositions it is wrong. Britains constitution is called the Treaty of Accession. It has been supplemented by the Treaties of Maastricht and Nice. It leaves us with an increasingly constricted area of national discretion. Our politicians can chunter about schools and healthcare while most other important topics are controlled or directed by the European Union (EU).

Remember Winston Churchills phrase about fighting them on the beaches. Well our beaches are entirely subject to the European Commissions directives. Britain cannot be responsible for the cleanliness of its shores, it seems. The EU is such an ambitious imperial force it is now assuming central control of defence procurement. Her Majesty the Queen will no longer have enemies for her military to fight. Martial matters are to be commanded by the EU.

You think I am exaggerating? We have the Department of Trade and Industry (DTI), which determines Britains policies on all the commercial horizons. No, it does not. The DTI has few residual functions that matter. It is largely the messenger boy for the instructions from the Commission.

These complex and detailed commands can be found, though I agree few of us look, in the acquis communautaire, the bulky handbook that is the 86,000 pages-long body of European law. These are not amiable abstractions or expressions of goodwill. They are the body of laws under which every British business operates.

Chancellor Gordon Brown told the Labour Party conference last September :If we are to make poverty history we must make the scandal and waste of agricultural protectionism history. Yet what can the British Chancellor of the Exchequer actually do? He has no powers to relax the organised corruption that is the Common Agricultural Policy (CAP). If, or when, he became our Prime Minister he could still do nothing. He can mutter. He can exhort. He has no executive authority. He has no levers. The CAP cannot be dented by words. It is the creation of the Commission. It is cocooned. Where is Britains trade policy devised now? The answer is the Article 133 Committee. It never publishes its deliberations. It meets in secret. Nobody joining its proceedings has ever been elected by anybody. Nor can they be dismissed. This is a conclave far more secretive than anything from the Da Vinci Code.

What do they do? They operate subtle but effective protectionist measures. Health and Safety Standards sound rather positive but in reality they are a bluff to deter African farmers exporting their nuts, cereals and fruits on the pretext they may have been treated with aflatoxin. The Commissions own advisers admit the danger is a mirage. Not one in a billion citizens would be poisoned. The Article 133 team also devise anti-dumping measures against non European food. Dont you feel lucky these unseen figures are protecting you so diligently from cheaper products? It is all very odd. British business seems to be sleepwalking. It may be unkind but I cannot resist saying I think the EUs game is up when you examine its admirers. The Confederation of British Industry (CBI) bleats its loyalty to the Commission and its baffling ritual phrase level playing fields. Trade benefits precisely from differences not uniformities. Comparative advantage, the heart of economics, is a notion that continues to elude the CBI. I am struck how the senior voices of British business, long mute on these themes, are now speaking out. I identify a number of names who are no longer too timid to speak out for reform. Tim Melville Ross, Sir Michael Angus, Lord Sainsbury, Sir Brian Williamson, Rupert Hambro, David Ord, Stuart Rose and Simon Wolfson are shrewd men. They can all see Britains business is with all of the world rather than our 23 continental neighbours.

The conspiracy at the heart of the EU, and Im sure that is the correct word, is to create a United States of Europe in emulation of the United States of America. This was exposed when the Dutch and French electorate rejected the idea. Yet these mishaps have not deflected the Commission from its anti-capitalist hostility to free-market spontaneity. My reservations would be diminished if the leading exponents of the EU project were ever frank about their grand plan.

I admit that I scoffed at the time of the 1975 European Referendum. I regarded those who said there would be an EU currency, industrial policy and defence and foreign policy as fanciful.

What powers do unfortunate Cabinet Minister actually wield? The substantive powers of Secretaries of State are evaporating. Real discretion accrues to the Commission each week. It is not long into criticism of the EU before the reprimand Little Englander is spoken. This is encouraging. This indicates brain death has occurred among the apologists for the Commissions bizarre autarchic regime. Those of us who want to renounce the EU are not protectionists. We want to be open to the world. The Little Englanders wanted to preserve the Corn Laws, ancestor of the CAP. The Common Market has decayed into something less than wholesome. It is an impediment to market processes. I believe it is a policy cul de sac from which we will eventually withdraw. Some seem to fear Britain would be punished in an unspecified way by angry eurocrats incited by the impertinence of Britons waving au revoir.

No doubt the nitty gritty detail of renouncing membership would be complex but in essence it could not be more simple. British businesses would start to live under UK law again. The great euro-tax of VAT could be cut. I fancy an easy rate of 10%. My strong hunch is commerce would flourish and Browns tax harvest would be boosted.

Which bits of the ceiling would fall in? I can think of none. It is true a few hundred Brits riding on the gravy train would be discomforted when it hit the buffers. They could find more useful things to do. MEPs could be re-trained into value adding roles though they will have to learn to pay for their own meals and transport again.

Make a leap of imagination. It is not a difficult mind experiment. The weeks after the UK ceases to be a province of the Belgian Empire, as Lady Thatcher termed it, we can liberalise our economy on every front. It is true we would be free to select preposterous options  higher taxes, or dafter regulations  but this is not in the grain of our political culture. Although we have been bound by EU rules for 35 years now, half of our trade remains outside the Commissions control. I do not think that patterns of trade would alter dramatically. Yet over time our economy, unencumbered by the Commission, would reconnect with the rest of the planet.

Is this a bit too abstract ? Look at the European nations that are flourishing best. They are Switzerland, Iceland and Norway. What do they have in common? Yes, you guessed correctly. Business will bubble with success when free of this drizzle of directives that is the EU.

John Blundell is Director General of the Institute of Economic Affairs.